TheDrop Market Analysis, 08/25/25

Markets fell from all-time highs on Monday as stocks begin correction after last week's last-minute surge following Fed Chair Jerome Powell's uplifting Jackson Hole speech.

Nvidia company logo, Getty Images.

The S&P 500 fell 0.4%, the Dow 30 fell 0.8%, and the Nasdaq composite fell 0.2%. Cryptocurrencies all fell with Ethereum and XRP driving down losses. Gold, silver, and the USD all strengthened in contrast with their losses from last week. The 10-yr bond rate rose 0.35%, reflecting the differences in performance between stocks and bonds. The VIX volatility index surged 4.01%.

Stocks fell as they begin correction from their monumental gains last week. Every major composite index rose by at minimum 1%, and stocks all over the board surged last Friday following Jerome Powell's announcement that a rate cut is likely coming within months, even as early as September. Investors, eager for a rate cut as they haven't been delivered one since last year, finally celebrated. But today shows that interest rate enthusiasm is merely temporary.

Later in the day in the after hours of the market, President Trump fired Fed governor Lisa Cook on account of "sufficient cause," referring to allegations over her participation in mortgage fraud. Many anticipate an internal war to ensue in the central bank as officials divide in ideological lines over future interest rate policy.

Nvidia started this week strong with a 1% rise as its stock gets several instances of price target hikes from large analysts as its earnings report is on the balance this week. The report will determine if the AI momentum continues, or if it is necessary to retreat from the "Magnificent Seven" and other top stocks on account of overvaluation, per Bank of America's warning recently.